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4 signs of money immaturity in teens

As your teenagers approach adulthood, you may wonder when they'll be ready for greater financial responsibilities, such as managing a checking account or credit card.

Your teens may be wondering the same thing.

"More than ever, credit cards, bank accounts and financial products are in our kids' future," says John Ulzheimer, president of SmartCredit.com. "We have the responsibility as parents to teach our kids to use them properly."

Although 36 percent of teens expect to eventually be financially better off than their parents, 20 percent are unsure of their current budgeting skills, according to a recent survey from Junior Achievement USA and The Allstate Foundation. Additionally, 23 percent are unsure of their knowledge of credit cards, and almost half have no idea how much they would need to pay for college.

"Kids mature at different rates, and the same goes for money maturity," says family finance expert Ellie Kay, author of the upcoming book, "Lean Body, Fat Wallet."

She says that while these four signs may suggest that your teenager isn't ready for more money responsibility, there are still ways parents can help foster financial growth in the children who display them.

1. Carelessness with personal items

Not surprisingly, general irresponsibility in teens can translate into financial irresponsibility, Kay says.

"If teens are constantly losing important personal items, such as home or car keys, cell phones, backpacks or wallets, they might not be ready for more money responsibility," says Kay. "If they are careless with items nearest and dearest to them, they may also be careless with a debit card."

2. Poor work ethic

Kay says that teens who have yet to pursue a job, whether working for you around the house or at a real job, may lack an appropriate respect for money.

"If teens don't want to earn money and don't know what it takes to earn it, they won't manage it well either," says Kay.

In addition, you may be able to gauge your teen's work ethic by how well he or she handles homework, grades or sports practices. When teens want money, their work ethic may mature quickly.

3. A taste for instant gratification

If you notice that your teens spend every cent the minute they get it (whether from a job or from an allowance), they are likely not mature enough to handle a bank account or debit or credit card, Kay says.

"If they want what they want and they are constantly asking for more money from parents, they are not ready to manage their own money," says Kay.

Ulzheimer adds that silly or immature purchases -- particularly those made on a credit card -- are another sign of questionable financial instincts.

4. Can't or won't do the math

Kay says that if your teens do not possess the basic math skills or patience to learn to balance a checkbook, then they are likely not ready to handle most adult financial responsibilities.

"Managing money takes diligence and attention to detail, and above all, math skills," says Kay. "These are important skills your teen must acquire in order to manage their own money properly."

Improving your teen's money habits

If your teen displays one or more of the signs above, there is still hope.

As teens mature, their instincts toward money may improve. They may suddenly become interested in getting a job, saving up for something or making wiser buying decisions. You can help by encouraging these signs of financial growth as much as possible.

Kay suggests starting small by giving your teen a set amount of money for a simple task, such as a school supply budget, monthly entertainment budget or fall clothing budget, depending on what you think they can handle. Talk with your teen about what needs to go into that budget.

For example, their fall clothing budget might include shoes, but no backpack or a jacket. Exposing your children to your planning process can help them start building one of their own.

"Further, give your child the option to save any unused portion of the budget to see if you can jump-start a desire to save money in your child," says Kay.

Additionally, Ulzheimer recommends adding your teen as an authorized user on your credit card (instead of co-signing for their own account) to help them learn responsible credit habits.

"It's like a credit card with training wheels," says Ulzheimer. "If they make mistakes using a credit card on your account, you will catch it before any serious debt racks up and correct the behavior immediately."

Ulzheimer says this can help you stay engaged in the learning process, help build credit in their name and monitor progress as they mature.

The blessing of mistakes

Whatever happens, don't give up on your teen. When teens make money mistakes with their checking account or credit cards, they may learn important lessons from the consequences, such as the dangers of bank fees or returned items.

While teens will ultimately measure their progress in dollars and cents, the peace that comes from knowing you helped improve their financial habits may be priceless.

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